FEMA has wrong institutional incentives--constant warnings equal continued funding--it's a money thing

by Monica Davis

There is a lot of money, some inefficiently used, in disaster management and mitigation.  One author says the much-maligned FEMA has the wrong funding incentives. In a time-honored bureaucratic fashion, the agency  often engages in self-serving warnings in order to maintain funding levels.

FEMA has all the wrong institutional incentives. Emergency managers have to keep their agency funded, so they’re always issuing warnings of disaster. I think of this as a continuum, from swine flu to Y2K to this. It’s always the same story. Part of that is the way funding structure works — they don’t have to cover the costs of their predictions. FEMA is telling communities to spend billions getting ready for an earthquake, but somehow we haven’t created a system where emergency management agencies are forced to think of the consequences.

They can overpredict because they don’t bear any of the costs; the costs of compliance don’t come out of their budget. This is a big failure in our whole emergency system: We haven’t incentivized the cost to find the sweet spot. You want to do the right amount of hazard mitigation — not too little and not too much. SOURCE

The institutional mechanisms behind disaster funding hold vast treasures of funding for local and state disaster agencies. In many cases “be prepared” means establishing conduits for the transfer of vast amounts of money from the federal to the state level. In 2007, Homeland Security awarded more than $1.6 billion to various state and urban agencies for everything from training to equipment acquisition.

The 2007 Homeland Security Grant Program (HSGP) will award more than $1.6 billion to enhance the ability of states, territories, and urban areas to prepare for, prevent, and respond to terrorist attacks and other major disasters. HSGP funds can be used for preparedness planning, equipment acquisition, training, exercises, management, and administration in order to obtain resources that are critical to building and sustaining capabilities that are aligned with the Interim National Preparedness Goal and respective State and Urban Area Homeland Security Strategies. SOURCE

The model for the international community, that is the industrialized nations, heavily relies on education, the development of mitigation plans, and increased awareness of the danger of WMDs as disaster generators. And massive amounts of money. This model also relies on centralized funding, the creation and maintenance of disaster management bureaucracies and  institutions.

Australia, Sweden, and the United States are examples of developed nations that have advanced emergency management institutions. Australia’s national government has an emergency management program that focuses heavily on using education to reduce vulnerability. The United States is now requiring that communities develop mitigation action plans to address rising disaster losses and it is giving special attention to WMD preparedness. SEMA, the Swedish Emergency Management Agency, takes responsibility to effectively coordinate their society’s ability to respond to crises. However, mistakes are still made frequently in developed nations and they have a bearing on vulnerability. For instance, beachfront property is a luxury commodity for the wealthy and such locations are at risk due to hurricanes. People also increase their vulnerability by building their communities on fault lines or near industrial centers. Developed nations do not have perfect emergency management programs. (McEntire and Mathis)

Conference participants in one Asian workshop discussed an “ideal system” of disaster management.  That system noted that local, regional and national levels of preparednessd were mandatory.  The concept of long-term funding as an integral part of disaster management became an integral part of recommendations.

Participants were aware that each country has distinct disaster management systems. However, they discussed an “ideal system” and its policy, legal, institutional and planning components. Examples include:

• Policy which outlines a general direction and commitment of resources. It should have a vision, guided by a philosophy and be easy to understand. Its goal should be the protection of lives.

• An ideal legal system should provide a clear mandate, distribution, roles, duties and responsibilities, including line of command and coordination.

• The ideal institutional scheme should be divided into five levels: community or village, city, provincial, regional and national.

• Good planning would be multi-sectoral and multi-level, with appropriate linkages at different levels, both horizontally and vertically.

• Multi-sectoral, issue-driven dialogues within countries. Important issues identified were community-based disaster management approaches and political commitment.

• Sub-regional workshops, conveying lessons learned and good practice. Participants appreciated learning from other countries.

• Assistance on information collection, analysis, research, facilitating dialogue, technical assistance and training on planning. There is a need to document and create a research agenda. Suggested topics were ways for attracting funding for disaster management, and how to shift the paradigm from relief to a culture of prevention. MORE

The problem many countries and taxpayers face is that the agencies devoted to disaster mitigation and management often fall victim to institutional sustainment models. This means that the organization’s need to survive soon creates an organic self-perpetuation model, as is the case of FEMA.  In such cases, the bureaucracy is more interested in obtaining funding in order to perpetuate its existence, than it is in efficiently managing and utiliziin that funding.

All of the warnings, hype and funding have a single objective–to perpetuate funding.  There is no doubt that we need to be prepared for disasters, however, we also need to manage our response to disaster. In this economic climate,  one of the biggest disasters out there is a financial one–agencies riding on the fear gravy train to fund bloated bureaucracies at the expense of the Treasury.